经济学第二章.pptVIP

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Price (dollars per printer) Quantity (millions of printers per month) 0 8.5 Supply Schedule Price ($ per printer) Quantity (millions of printers per month) $175 10 150 9.5 125 9 Supply $175 9 9.5 10 8 $150 As the price falls, the quantity of printers supplied decreases $125 Plotting a supply curve Price (dollars per printer) Quantity (millions of printers per month) 0 8.5 Supply Schedule Price ($ per printer) Quantity (millions of printers per month) $175 10 150 9.5 125 9 100 8.5 Supply $175 9 9.5 10 8 $150 As the price falls, the quantity of printers supplied decreases $125 $100 Plotting a supply curve Price (dollars per printer) Quantity (millions of printers per month) 0 8.5 Supply Schedule Price ($ per printer) Quantity (millions of printers per month) $175 10 150 9.5 125 9 100 8.5 75 8 Supply $175 9 9.5 10 8 $150 As the price falls, the quantity of printers supplied decreases $125 $100 $75 Plotting a supply curve Deriving the market supply curve Market supply is the supply by all the firms of a given good or service The market supply curve is derived by horizontally summing all the individual supply curves for a good or service in the same way as we derive the demand curve  Deriving the market supply curve from the firm’s supply curves The law of supply Holding everything else constant increases in the price of a product cause increases in the quantity supplied decreases in price cause decreases in the quantity supplied the ceteris paribus condition ‘all else being equal’ requirement that when analysing the relationship between two variables, such as price and quantity demanded, other variables must be held constant Relaxing the ceteris paribus assumption Prices of inputs increase in the cost of an input increases the cost of production firm supplies less decrease in the cost of an input decreases the cost of production at every price firm s